The European Commission decided today to seek the agreement of the Council and the Parliament to mobilise the European Union Solidarity Fund (EUSF) for granting emergency aid of € 47.6 million to Italy. € 30.8 million are proposed to be used for financing emergency operations such as temporary accomodation following the disaster caused by a series of earthquakes affecting the regions of Molise and Apulia. € 16.8 million should be used for the disaster caused by the eruption of Mount Etna and subsequent earthquakes.

Michel Barnier, Commissioner responsible for regional policy and the Solidarity Fund, said: “These decisions express the Union's solidarity with the Italian regions by helping them to restore their infrastructure and reimburse emergency measures”. Commissioner Michaele Schreyer, responsible for the budget, added: “The Commission also proposes today the amending budget corresponding to this proposal. We trust that the Council and European Parliament support this, so that Italy rapidly receives the 46.7 mio € from the new Solidarity fund.”

Mobilising the Solidarity Fund for these two disasters is only possible on the basis of exceptional provisions as in neither case damages reached the regulatory threshold of € 3 billion. In the case of a third EUSF application made by Italy for the flooding in Northern Italy in November 2002 the specific conditions for an exceptional mobilisation of the fund were not met.

In case of the Molise earthquake disaster in October 2002, some 243,000 inhabitants in 79 municipalities were directly affected. The damage to infrastructure and numerous public and private buildings, including farms, caused major disruption to the region and is estimated at over € 1.5 billion. Economic production and commerce was brought to a standstill and this inflicted serious and lasting harm on the region's economy. Over 20% of buildings were declared unfit for habitation, close to 12,000 people had to be placed in temporary accommodation. The EUSF funds of € 30.8 million are intended primarily to finance the cost of the provision of temporary accommodation, immediate restoration of affected public infrastructure, to consolidate preventive infrastructure, and to protect cultural heritage in the affected areas in Molise and Apulia.

Following the eruption of Mount Etna in Sicily, which began in late October 2002 and lasted several months, 86% of the one million population of the Province of Catania was directly affected by the disaster. The major part of the population was exposed to the toxic downfall of volcanic ash, which represented a major hazard to public health. Severe damage through earthquake tremors and lava affected 160,000 people, rendering over 3,000 habitations and a number of public buildings unsafe and causing estimated direct damage of € 849 million.

The EUSF grant of 16.8 million is intended to reimburse the cost of emergency measures, immediate restoration of affected infrastructure, to consolidate preventive infrastructure, to protect cultural heritage and to clean up affected areas in the Province of Catania.

Payments from the fund could flow immediately after the approval by the Council and the European Parliament of the necessary budgetary appropriations and following conclusion of an agreement between the European Commission and the Italian Government on how the aid should be used.

To enable a quick decision by Council and Parliament, the Commission has adopted today the corresponding proposal to mobilise the Solidarity Fund and a Provisional Draft Amending Budget. The latter request does not cover payment appropriations, the sum necessary can be found by redeployment within the sums already budgeted. The proposal will be presented by Commissioner Schreyer to the ECOFIN budget meeting on 16 July 2003.

Background

Following the floods, which hit central Europe in August 2002, it was decided to create a new European instrument for granting emergency aid to the Member States and applicant countries in the event of a major disaster. Based on Commission proposals for a Council Regulation establishing a European Union Solidarity Fund (EUSF) and an inter-institutional agreement between the European Parliament, the Council and the Commission, the legal and budgetary instruments were decided in November 2002. A maximum of € 1 billion per annum can be made available through the EUSF.

To qualify for aid under the Solidarity Fund, countries hit by a major disaster must provide an estimate of the damage and meet specific criteria, ensuring that EU funds are used to meet the most urgent needs. A "major disaster" is an event causing damage estimated at over € 3 billion or more than 0.6% of the gross national income of the state concerned. Under exceptional circumstances a region can also benefit from assistance from the fund where it has been affected by an extraordinary disaster affecting the major part of its population with serious lasting repercussions on living conditions and the economic stability of the region. Particular focus will be on remote or isolated regions, such as the outermost regions.

The total annual budget available for regional disasters is 75 million, of which a maximum of 75% or 56,250 million € can be granted before 1 October. In line with the degree of support awarded last year, the proposed rate of assistance is 2,5% of total direct damage. However, the application of this rate would lead to an amount in excess of the financial constraint. Consequently, the Commission proposes that the aid per application be capped proportionally so that, globally, 56,250 million € is arrived at. The individual sums are 8,6 million for Prestige, 30,8 million for Molise and 16,8 million for Sicily.